Market equilibrium effects of incentives to foreign direct investment

Pedro Pita Barros

doi:10.1016/0165-1765(93)00328-L

Market equilibrium effects of incentives to foreign direct investment

Pedro Pita Barros

NOVA School of Business and Economics (NOVA SBE)

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

This note shows that a country may want to give a certain type of incentive to foreign direct investment (subsidy to marginal costs of the foreign firm), even if no further gains (job creation, technology transfer and the like) are available. The crucial element is that subsidies may change the market equilibrium in a favorable way to the country.

Original language	English
Pages (from-to)	153-157
Number of pages	5
Journal	Economics Letters
Volume	44
Issue number	1-2
DOIs	https://doi.org/10.1016/0165-1765(93)00328-L
Publication status	Published - 1994

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abstract = "This note shows that a country may want to give a certain type of incentive to foreign direct investment (subsidy to marginal costs of the foreign firm), even if no further gains (job creation, technology transfer and the like) are available. The crucial element is that subsidies may change the market equilibrium in a favorable way to the country.",

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AB - This note shows that a country may want to give a certain type of incentive to foreign direct investment (subsidy to marginal costs of the foreign firm), even if no further gains (job creation, technology transfer and the like) are available. The crucial element is that subsidies may change the market equilibrium in a favorable way to the country.

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Market equilibrium effects of incentives to foreign direct investment

Abstract

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